Sometimes, investment in your future with your spouse leads you to acquire debt. You may pursue an education to better support your family, purchase a home or invest in a vehicle. If you decide to part ways in the future, though, those debts could impact your financial health as you move forward with your life.
Thankfully, prenuptial agreements can provide you with protection from these debts. How might a prenuptial agreement benefit your financial health?
How might debts become your responsibility?
In Texas the debts you acquire during your marriage that benefit both you and your spouse are “community property,” and the court will likely split between you and your spouse if you divorce. This may be true even if only one person’s name is on the loan paperwork or the credit card. As a result, you may become responsible for a wide variety of different debts, including home loans, car loans or student loans.
How can a prenuptial agreement help protect your financial health?
While many couples divide their debts in a divorce, it is possible to legally classify your debts as separate property through a prenuptial agreement. This legal agreement allows you to define which property and debt you and your spouse own jointly and which you or your spouse own separately. In fact, loans — specifically student loan debt — are one factor that increasingly leads couples to pursue a prenuptial agreement.
While debt can become a challenge when dividing property in divorce, a prenuptial agreement can provide you with security and confidence if you face difficult times in the future.